Condiciones de implantación de las actividades terciarias o de servicios

The Nordic countries have a history of a common Nordic labour market, in combina- tion with rather restrictive immigration regimes towards job applicants from non- Nordic countries. However, the EEA agreement, put into effect on 1 January 1994, rep- resented significant changes in the labour migration policies of its member states, creat- ing one common labour market within the whole of the former EEC and EFTA areas. Unions in Scandinavia were preoccupied with how the agreement would affect the la- bour market in the Nordic countries. The major concern they raised was the possibility that increasing labour immigration might lead to social dumping, in the form of a downward pressure on wages and working conditions, and increased unemployment among native workers. Similar concerns are raised today, facing a widening of the EU that will – eventually – include the Baltic states in the common EEA/EU labour mar- ket. On the other hand, the need for labour immigration has increased significantly over the past decade, and is believed will grow further in the years to come. The same will probably be true for most Western European countries, due to a similar demographic development. Some of these countries have already experienced that attracting qualified immigrants was more difficult than expected (Brochmann 2001). With the expected economic growth in the new Member States, the incentives for low-skilled workers to migrate will also be weakened, as the wage gap between the Nordic states and these states will diminish. Hence, the concern for eroding working conditions for national workers is to a certain extent replaced by the concern for not being able to attract enough immigrants to ensure economic growth and sustain the supply of welfare ser- vices. The attitudes towards immigration from the Baltic States could therefore be ex- pected to be somewhat schizophrenic: We want them – and we don’t want them.

Possible effects of immigration

Most states would welcome foreign workers who possess skills that are in demand in the national labour market, while migrant workers with skills that are easily found will be less popular. The availability of workers who have the right type of skills is obviously in the interest of the employers, it has a positive effect on the economy, and the impact on the wages of native workers can be expected to be much less when immigrants pos- sess different qualifications and educational levels than native employees (as they would not enter in direct competition with the native labour force).

Still, in a common labour market, the single state’s ability to influence who chooses to immigrate and in what numbers, is limited. A widening of the common market could facilitate the supply of labour, but there is also a risk that some national labour markets will experience an increase in the supply of labour that will upset the balance of the

market. Given the same number of migrants, this risk increases if the skills of the group of migrants are similar.

Excess supply of labour is likely to lead to a downward pressure on wages and/or in- creased unemployment, as well as a pressure on welfare benefits.1 _{In this situation, there}

is a potential conflict of interest between employers and native employees, and of course between native workers and immigrant workers. There could even be a conflict of inter- est between the country of destination and the country of departure, as influx of labour will benefit the country of destination, draining the sending societies of skilled person- nel. This “brain-drain” hypothesis is however not one-dimensional. Workers who have emigrated represent an important income source for many societies. It has also been argued that the possibility of emigration increases the educational activities of the emi- gration societies, leaving them with at least the same level of skilled personnel (Stark & Wang 2001).

Uncertain predictions of future migration

We have not attempted to predict figures for the future migration from the Baltic States. Several predictions of increased labour migration in the wake of the forthcoming EU enlargement exist already (Fassmann & Münz 2002; Boeri and Brücker, 2000). These studies predict a more or less moderate increase in migration, but the predictions must be interpreted with great caution. They are generally based either on “our” type of data, that is surveys of the population, or on extrapolations of historic migration patterns. None of these methods can be expected to be accurate, particularly not in a situation of radical changes in the migration regulations.

Our analysis suggests that there is a potential for migration from the Baltic, but that it is unlikely that we will observe a massive movement of workers. First of all, the small size of the populations of the Baltic States is in itself a major restriction. Secondly, the proportion of the population with plans to migrate is limited, and the Nordic states are not the preferred destination. However, it could be that the number of persons inclined to migrate will increase when the access to the EU labour markets is improved. The high number of seasonal migrants from the Baltic countries also indicates that the po- tential for short-term migration is relatively high. In addition, Baltic firms will gain ac- cess to the Nordic markets, and will have every right to bring their employees with them on their contracts in Nordic countries. So-called “posting” of workers is not conditional on the same type of migration decision as individual migration is, and our data on mi- gration intentions is hence less useful for assessing that kind of labour movement.

Given the historical patterns of migration, and the proximity of the Baltic States to the Nordic countries, our guess is that different types of temporary migration will be the dominant form of migration, particularly in the first period after the EU enlargement. This type of migration may be large enough to have a noticeable impact on wages and labour opportunities, at least in some sectors of the Nordic economies.

On the other hand, the expected economic growth resulting from EU membership will reduce the economic incentives for migration. Language problems also constitute a major obstacle for migration, with the exception of Estonians who work in Finland. Language problems will, however, be of less importance in the case of posting of work- ers.

Among the Nordic countries, Finland has had, and must expect to continue to have, by far the largest group of immigrants from Estonia. This follows not only from the linguistic similarities, but also the geographical proximity. Labour migration in the form of commuting is likely to become more appealing if border control ceases. Still, the in- clusion of Estonia in the common market will not necessarily lead to a large increase in immigration from Estonia, since accessibility to the Finnish labour market is already quite good for Estonians.

Monitoring and surveillance of working conditions

Traditional economic theory suggests that labour migration is good, allowing workers to move to where the return on their labour is highest. This is of course the reason why freedom of movement is one of the four freedoms of the common market. However, free movement of workers in combination with considerable international wage gaps within the common market could create situations which undermine the positions of the national unions. The challenge has been met with different strategies by the Nordic un- ions. In Norway, the debate resulted in a law of generalisation of collective agreements. The law was passed in 1994, but has never been implemented. The law grants labour and employers’ organisations that are parties to a collective agreement the right to claim that the conditions set out by the collective agreement should fully or in part be applied to all workers in the industry and territory covered by the collective agreement. Similar regulations are formulated in the Finnish law on collective agreements (Arbetsavtalslag). Still, Finnish unions consider the legal protection against social dumping to be inade- quate, and demand legal reform to strengthen the inspections of employees sent by for- eign contractors, and to increase the sanctions for abuse of foreign labour (Trade Union

News from Finland, 16 March 2002). Denmark has little tradition of regulating the labour

market through law, and the unions’ strategy is to fight social dumping through indus- trial action. After the conclusion of the EEA agreement, Danish LO and its counterpart DA signed an agreement with the intention to force foreign employers to join a Danish employers’ organisation, ensuring that Danish collective agreements would apply for every employer and employee in Denmark. Swedish LO also relies on industrial action to stop social dumping. A 1991 amendment to the Swedish labour law does, however, grant Swedish unions the right to demand establishment of Swedish collective agree- ments for foreign workers on Swedish territory.

So far, there has been no massive influx of EU workers to the Nordic countries. Still, problems of social dumping are not unknown, despite the efforts made by the national unions. A recent example from Norway is the alleged breaches of the labour law com- mitted by subcontractors to the one of the major construction projects of Statoil (Statoil Mongstad). The national authority responsible for surveillance of the labour law (Ar- beidstilsynet) reported the case to the regional police authorities in February 2003, after being tipped off by a union (EL&IT-forbundet) (Bergens Tidende, 21.2.2003). The case is still under investigation. In Sweden, inspections by the unions have uncovered Baltic construction workers being paid 20–30 SEK per hour (Junesjö 2002). A report from a working group put together by the Nordic Council gives a number of examples of social dumping in the Nordic countries (Nordisk Ministerråd 2000).

As mentioned above, the effects of migration on the Nordic labour markets will de- pend on who the migrants are. In the Baltic populations, the inclination to migrate is highest in the extremes of the income distribution, but the differences in migration rates between the income groups are moderate. The most notable group differences in the propensity for migration are to be found within the variables gender and ethnicity: women and residents who are not Baltic citizens are significantly more likely to migrate than others. The non-Baltic citizens are, however, mainly Russians, and their preferred country of destination is Russia. Accordingly, the migrants are likely to constitute a rather heterogeneous group, with a slight overrepresentation of women and members of the highest and lowest income-groups. Consequently, there is reason to believe that the migrant workers will be spread out over a large part of the Nordic labour markets, avoiding the situation where some areas experience a vast increase in labour supply. This does not necessarily mean that problems of social dumping will be equally distrib- uted between industries. Problems of monitoring and controlling wages and labour conditions and hence of enforcing national (and supernational) regulations are not equally distributed. In the wake of the EEA/EU agreements (that resulted in the loss of the work permit as a control-mechanism), the unions have played an increasingly impor- tant part in the policing of wages and labour conditions of foreign workers. Hence, in- dustries with a low level of unionisation represent a challenge for the control organs. The same is true for industries where subcontracting is widespread and/or that have elements of the underground economy (Djuve 1994).

Challenges for the Nordic countries

Short-term migration and posting of workers can be expected to be the dominant forms of migration, accentuating the existing problems of control and implementation of national regulations of labour conditions, particularly in sectors where unionisation is low. We believe that the Nordic countries would benefit from continued research on the control and implementation strategies which have been tested in each country.